National plaintiffs’ law firm Keller Postman LLC has filed a federal lawsuit against LinkedIn alleging unfair-competition, fraud, and breach-of-contract claims on behalf of a class of plaintiffs who purchased advertisements on the platform.
Filed in the U.S. District Court for the Northern District of California, the complaint alleges that LinkedIn consistently overcharges advertisers because it inflates the advertising metrics on which businesses rely when placing bids to purchase LinkedIn advertising.
The lawsuit seeks to put an end to LinkedIn’s misrepresentations about its advertising metrics and to require LinkedIn, which is owned by Microsoft, to increase transparency into how it calculates and reports user activity on the platform.
“It is unacceptable for digital advertising platforms such as LinkedIn to misreport metrics that are crucial to marketers in deciding how much to bid on advertising slots, if at all,” Keller Postman Partner Warren Postman said. “This lawsuit is being filed not just to stop LinkedIn’s allegedly unfair and fraudulent business practices, but to increase transparency into whether LinkedIn’s advertising metrics truly reflect user engagement with paid advertisements.”
According to LinkedIn’s own admission, LinkedIn has known for months that it has been overstating the amount of time users spend watching paid video advertisements. This includes charging advertisers for video “views” even where videos are playing completely off-screen. These and other problems with LinkedIn’s Sponsored Content Advertisements have occurred for more than two years. Nevertheless, LinkedIn aggressively markets its platform as a premium product that allows sophisticated marketers to advertise to highly engaged audiences of working professionals.
The scope of the lawsuit goes beyond what LinkedIn has already admitted. As further alleged in the complaint, LinkedIn charges for advertisement engagement that it knows is not authentic. Studies show that LinkedIn’s metrics include extensive traffic generated by fraudulent accounts, bot traffic, and misclicks, rather than genuine user engagement with ad content. These factors allow LinkedIn to systematically overstate the quality of user engagement and collect inflated advertising prices from advertisers.
“If advertisers had known the truth about LinkedIn’s false claims about user engagement, they never would have paid the premium prices LinkedIn charged,” Postman said. “LinkedIn marketed itself as an advertising platform with a high-quality audience that would engage with advertising content. Even after the point when LinkedIn claims it discovered faulty ad metrics on its platform, it continued to charge inflated prices for advertisements on its platform for months.”
The complaint notes that, unlike other digital advertising platforms, LinkedIn does not allow third-party analysis of its advertising metrics and user engagement. LinkedIn advertisers—which are primarily small businesses—therefore must rely on LinkedIn’s representations about user engagement when placing bids in online auctions for advertising inventory on the platform, all of which is run by LinkedIn.
LinkedIn’s inaccurate metrics misled customers into believing that advertising on LinkedIn’s platform was more effective than it actually was. The complaint details how LinkedIn’s lack of transparency allowed it to get away with misrepresenting user engagement on its platform for years and therefore charge more for advertising slots. The complaint alleges that these issues with LinkedIn’s ad metrics did not give advertisers the benefit of their bargain.
The lawsuit includes claims for violations of state unfair competition law, fraudulent misrepresentation, fraudulent concealment, breach of the implied duty to perform its contract with advertisers with reasonable care, and breach of the implied covenant of good faith and fair dealing. It also seeks an order enjoining LinkedIn from continuing to engage in the alleged wrongful acts, requiring LinkedIn to engage third-party auditors to evaluate and correct problems with LinkedIn advertisements, and requiring LinkedIn to disclose any further inaccuracies with respect to its ad metrics in a timely and accurate manner. The lawsuit also seeks monetary damages, restitution, punitive damages, attorneys’ fees, and costs.
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*As of April 2022, the firm has changed its name from Keller Lenkner to Keller Postman.
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